Scale Computing Takes Aim At VMware With $35M Funding Round

Scale Computing is infusing nearly $35 million in funding to attack VMware environments through channel partners enablement and its new global strategic partnership with Lenovo.

The Indianapolis-based hyper-converged and edge computing specialist unveiled on Thursday that it raised $34.8 million in a Series F funding round led by Lenovo, a company that Scale Computing formed a partnership with last week to bring intelligent edge computing to enterprises, SMBs and retailers.

"We are going to hire additional dedicated channel resources to work with our partners to enable sales and technical training as well as engage in opportunity development with Lenovo and their channel resources," said David Hallmen, chief revenue officer at Scale Computing, in an interview with CRN. "We can go after VMware with one our biggest differences between Scale HC3 and a VMware-base solution, which is our ease of use. It's one of the key reasons why Lenovo found our solution to be a great interest in what they're trying to achieve with their edge computing strategy."

The new joint product partnership combines Lenovo servers with edge infrastructure software from Scale Computing to deliver a highly-available platform for running applications at the edge or hybrid edge and cloud. Scale's HC3 edge platform on Lenovo servers aims to replace complex and expensive on-premise infrastructure with a solution optimized for environments in which application uptime is critical and IT resources are limited, said Hallmen.

"We've been attacking VMware [environments] with Scale already. The backing of Lenovo puts some more legitimacy in there," said Joel Althoff, president of Monticello, Iowa-based Infrastructure Technology Solutions, which partners with Scale Computing and Lenovo. "I've run into a few customers that I've been surprised who have moved over to the KVM [hypervisor] system. People are tired of the ongoing maintenance with VMware."

One recently announced Scale Computing customer win included Jerry's Enterprises, a large North American food retailer. Jeff Miller, IT Director for Jerry's, said in a statement that Scale's platform is unique in its ability to "set-it and forget-it."

"When we deploy Scale, not only do we eliminate the need for VMware, backup software, and disaster recovery software at that location, but we also eliminate 90 percent of the time previously spent managing infrastructure," said Miller.

Scale Computing plans to invest the $34.8 million in creating new partner portals and more channel field and online training enablement to help drive sales and technical certifications around its flagship HC3 hyper-converged platform that integrates server, storage and virtualization into a single appliance.

Additionally, the vendor will provide partners with new market development funding (MDF), primarily for in-field marketing demand generation and customer appreciation events.

Scale Computing’s total revenue has more than doubled over the past two years. Hallmen said he expects sales growth to increase even faster in 2019 thanks to the backing of $45 billion Lenovo.

Althoff said Scale Computing’s revenues have grown double digits this year compared to 2017 and expects more sales growth next year.

"One of the things that Lenovo brings to the table for us is they know how to manufacture a product and how to take all the waste out of it and make it efficient. On the other side, Scale has the software that makes things simply work. If you put those two together, there's a lot of value because you're going to have very high up-time and really reliable product," said Althoff. "You'll see that partnership will give Scale the ability to deliver larger numbers. It will give them the ability to go-to-market faster as far as product delivery, which is a great thing for us."